Market Highlights: Fed hints at more rate cuts, gold hits highs, and all eyes on RBA today

The ASX is poised for a slight drop as investors digest Fed rate cut hints. Meanwhile gold hits record highs and the RBA’s decision looms.

Gold prices hit record highs while Tesla and Boeing rise. Pic via Getty Images

• ASX set for slight drop as investors digest Fed comments

• Fed officials hint at potential future rate cuts

• Gold prices hit record highs while Tesla and Boeing rise

The ASX is looking at a slight drop when the market opens on Tuesday despite Wall Street’s gains, with investors sifting through comments from US policymakers.

At 8am AEST, the SPI ASX200 futures contract was pointing down by 0.1%.

Overnight, the S&P 500 finished higher by 0.28%, the Dow Jones was up by 0.15%, and the tech heavy Nasdaq climbed by 0.14%.

US traders were excited after Fed officials pointed to the possibility of more rate cuts ahead.

Chicago Fed President Austan Goolsbee said that as inflation nears the central bank's target, the focus should shift to the labour market, adding “that likely means many more rate cuts over the next year.”

Neel Kashkari from the Minneapolis Fed also pointed to weakness in the job market and supports another 50bp rate cut by year’s end.

Meanwhile, Raphael Bostic at the Atlanta Fed took a more moderate view, warning against making a habit of large rate cuts in the future.

To stocks news, Intel jumped another 3% after private equity powerhouse Apollo Asset Management committed to a US$5 billion investment in the ailing Silicon Valley icon, presumably to thwart any potential moves by Qualcomm.

Earlier, Qualcomm reportedly made informal overtures to Intel about a potential takeover, which could become the largest tech merger in history.

Now read: Nasdaq Wrap: History signals rally ahead after Fed cut; and is Intel ready for an epic merger?

Tesla popped 5% ahead of the company's Robotaxi day on October 10th where it will be showcasing its Full Self-Driving technology.

Bank of America said in a note that if the event goes well, it could really boost Tesla, as Tesla’s flair at these events often gives the stock a nice lift.

Boeing Co rose 2% after proposing a 30% wage increase to its biggest union in an effort to resolve a deadlock that has halted aircraft production.

Microsoft, meanwhile, received a rare downgrade from Wall Street as some analysts are worried the tech giant relies too much on Nvidia for its AI tech and that its competitors have closed the gap.

Analysts at D.A. Davidson lowered Microsoft's rating from Buy to Neutral, but kept the price target at US$475, versus current price of US$433.50. Microsoft was down 0.4%.

To commodities, gold prices continued to rise to record highs.

Spot gold remained above the crucial US$2,600 per ounce mark after reaching a record high of US$2,635.05 earlier last night.

Back home, Aussie investors will be focused on the Reserve Bank's cash rate decision at 2:30pm AEST today which is widely anticipated to remain unchanged, along with Governor Michele Bullock’s press conference that follows.

How the RBA could impact the Aussie dollar

Scott Solomon at T. Rowe Price believes that although most of RBA’s central bank peers have begun cutting rates, he doesn’t expect the RBA to make any adjustments – neither cuts nor hikes – today.

Solomon also said that, barring any major changes in economic data, Australian borrowers are unlikely to see any relief for the remainder of the year.

However, he noted that a hawkish stance from the RBA could strengthen the Australian dollar.

“While it’s unlikely the RBA directly comments on the currency, they should welcome a stronger AUD as it supports the inflation fight as Australians reap the benefit of falling relative prices of imported goods,” Solomon wrote.

The AUD is trading at US68.39 cents at the time of writing.

In other markets …

Gold price rose by 0.2% to US$2,627.75 an ounce after earlier touching its all-time high of US$2,635.05.

Oil prices closed 0.5% lower despite Israel ramping up its attacks in southern Lebanon, with Brent crude now trading at US$74.20 a barrel.

The benchmark 10-year US Treasury yield was flat at 3.75%.

Bitcoin was up 1% in the last 24 hours to US$63,318, and Ethereum surged by 4% to US$2,653.

Meanwhile, iron ore retreated by 2% to $US89.75 a tonne, a one-year low. Analysts point to weak demand from China, particularly in the country's housing construction sector.

5 ASX small caps to watch today

Ragnar Metals (ASX:RAG)
Ragnar has announced findings from its exploration at the Olserum North Heavy Rare Earth Project in southern Sweden, where it has identified promising rare earth element potential at the Melson prospect. Rock samples revealed a biotite-magnetite shear zone with assays of up to 1.75% total rare earth oxide and up to 71% heavy rare earth oxide. New syenite intrusions have also been mapped over an area of at least 50 by 20 metres, indicating potential for large deposits. Further fieldwork is planned, with collaboration from experienced consultants to explore these findings, starting in early October, including magnetic surveys to identify more mineralised areas.

Alto Metals (ASX:AME)
Alto Metals announced some strong results from metallurgical testwork at its Indomitable site, achieving a gold recovery rate of up to 97% through gravity separation and cyanide leaching. The tests, conducted on fresh rock samples, showed high gravity recovery of 64.8%, with significant recoveries of 89.4% within two hours and 97% after 24 hours. These findings boost confidence in the Indomitable deposit and the broader Sandstone Gold Project, which spans over 740 km² in Western Australia. A drilling program of around 3,500 metres is currently underway to explore new targets in the region.

ImpediMed (ASX:IPD)
ImpediMed announced that US-based Emblem Health and Presbyterian Health have updated their medical policies to include coverage for IPD’s Bioimpedance Spectroscopy (BIS) in lymphoedema assessment. This means coverage now extends to 144 million lives across 16 states. Emblem Health’s new policy applies to breast cancer patients in New York, Connecticut, and New Jersey, allowing BIS assessments without pre-authorisation. Similarly, Presbyterian Health, the largest payor in New Mexico, has also made BIS accessible without pre-authorisation.

Global Uranium and Enrichment (ASX:GUE)
GUE has announced promising results from its first drill program at the Maybell Uranium Project in Colorado. Ongoing drilling has revealed significant high-grade uranium mineralisation, including a notable intersection of 4.6 metres at 0.30% U3O8. Other results include multiple sections with varying grades. Maybell is known for its historical production of 5.3 million pounds of U3O8. The company has completed 11 drill holes so far, with the program expected to wrap up by the end of September.

Kuniko (ASX:KNI)
Recent drilling at the Ertelien Nickel-Copper-Cobalt Project has revealed promising assay results, showing 1,200 metres of disseminated sulphide mineralisation, including some high-grade zones. The findings indicate growth potential for the current Mineral Resource Estimate (MRE) and help clarify three identified mineralised areas. Highlights include shallow mineralisation with grades such as 0.22% NiEq over 48.5 metres from drillhole KNI_ER007, as well as high copper grades reaching 1.52% Cu. The mineralisation at Ertelien resembles that of the renowned Voisey's Bay deposits, and an update to the MRE is expected early in the fourth quarter of 2024.

Originally published as Market Highlights: Fed hints at more rate cuts, gold hits highs, and all eyes on RBA today